Letter: Here’s how IBM’s new retiree plan works

I am a New York licensed health/life insurance agent with a national company. My specialty is Medicare plans, so I would like to make sure the public has a more complete and broader understanding of the new IBM retirement plan and doesn’t come away thinking that IBM’s new plan is wonderful.

I cannot go into the complexities of all the details of the plan. Suffice it to say that the majority of beneficiaries of the new IBM/Extend Health plan will be paying considerably more for equivalent coverage for plans offered by IBM this year. Also, considerably lesser funds are allotted in the IBM Health Reimbursement Account for spouses to get coverage equivalent to recent years.

Generally, a retiree gets $3,500 per year to cover two people if the retiree is married. In my situation (and many others I have recently counseled in several states), whereas I was paying about $18 per month (total premium for me and my wife) in recent years, I will be paying about $206.50 each for the retiree and the spouse per month for an equivalent plan in 2014. That eats up all of the HRA funds with a balance of about $1,500 out of pocket. That leaves no funds left to cover dental, vision and part D (for drugs).

Married retirees have been cut sharply (which means spousal coverage has been cut) and their lifetime coverage has been reduced considerably should the spouse become a widow or widower. Benefit options for a surviving spouse can be applied for, however the $3,500 annual amount available is reduced to $2,600 while the retiree is alive and, when deceased, the surviving spouse gets $1,300 per year. These are all 2014 numbers.